Government Aims to Raise Rs132 Billion Annually from Domestic Consumers
The federal government has proposed a sweeping restructuring of electricity tariffs, introducing new fixed monthly charges for all domestic consumers while reducing per-unit rates. The plan, presented to the National Electric Power Regulatory Authority (Nepra), aims to collect an additional Rs132 billion annually from households and redirect Rs101 billion in subsidies toward the industrial sector.
New Fixed Charge Structure for Protected and Non-Protected Consumers
For the first time, fixed charges will apply to both protected and non-protected domestic consumers using up to 300 units per month. Previously, only non-protected users consuming over 300 units paid such charges.
- Protected consumers using up to 100 units: Rs200 per month
- Protected consumers using up to 200 units: Rs300 per month
- Non-protected consumers using up to 100 units: Rs275 per month
- Non-protected consumers using up to 200 units: Rs300 per month
- Non-protected consumers using up to 300 units: Rs350 per month
Subsidy Reductions and Industrial Support
The government has reduced subsidies for protected consumers in the lower slabs by Rs51 billion, bringing total subsidy support down to Rs423 billion. For non-protected consumers, Rs29 billion in subsidies have been withdrawn from the first two slabs, with another Rs21 billion removed from the 201-300 unit category.
The Rs101 billion generated from the new fixed charges will be used to subsidize the industrial sector, which officials describe as crucial for economic recovery. This move aims to lower industrial electricity tariffs by up to Rs4.04 per unit.
Per-Unit Tariff Cuts for Households
Alongside the new fixed charges, the government has proposed reductions in per-unit electricity rates for domestic consumers:
- Up to 400 units: Rs1.53 per unit reduction
- Up to 500 units: Rs1.25 per unit reduction
- Up to 600 units: Rs1.40 per unit reduction
- Up to 700 units: 91 paisa per unit reduction
- Over 700 units: 49 paisa per unit reduction
Solar Net-Metering Policy Faces Parliamentary Scrutiny
Separately, the government faced sharp criticism in the Senate over recent changes to solar net-metering regulations. Opposition lawmakers condemned the shift from net-metering to net-billing as a “grave breach of trust” that would harm citizens who invested in solar systems based on government assurances.
Power Minister Sardar Awais Leghari defended the changes, stating that Nepra acted within its legal authority to prevent a Rs200-550 billion burden from being shifted to 30 million consumers who cannot install solar systems. He emphasized that existing contracts for 466,506 net-metering consumers would be honored, with new regulations applying only to future consumers.
Regulatory Process and Next Steps
The Power Division presented the tariff restructuring proposal during Nepra hearings chaired by Chairman Waseem Mukhtar. Officials from the Power Planning and Monitoring Company briefed the regulator on the new structure, which aims to rationalize tariffs and reduce cross-subsidies. Nepra is expected to announce its final decision after completing stakeholder consultations.
